Ottawa to record larger than expected deficit

Finance Minister Bill Morneau’s fall economic update shows deficits over the next five years will be bigger than previously thought.

Ottawa’s deficits will be a total of $31.8 billion bigger than projected in the last budget, mainly because of slow economic growth.

The updated figures show that the deficit this year will be $25 billion, which is $2 billion higher than projected.

The red ink will continue to flow in 2017-18, with the deficit expanding to almost $28 billion.

Morneau also says he will create an infrastructure bank with $35 billion in seed capital, meant to leverage private-sector investment and spur growth.

For now, the government has eliminated the $6-billion contingency fund that was set aside for every year in last year’s budget to deal with unexpected problems, a move that makes the government’s deficit figures seem slimmer.